Open-end mutual fund or open-ended mutual fund is a set of investment schemes that can issue and redeem shares at any time.
In the open-end fund, the price at which shares are issued or redeemed varies to the net asset value of the fund and soon will directly reflect on the fund’s performance.
ADVANTAGE OF INVESTING INTO OPEN-END FUND
Open-end or open-ended fund is equitably distributed or divided into shares
OPEN-END MUTUAL FUND FUTURE PERFORMANCE
The open-end fund offers investors a convenient way to gain equity investments. This will continue as more investors seek to divert their portfolios into the markets. Most of the open-end funds are actively managed. A portfolio manager picks the securities to buy.
As funds sell shares daily, the open-end funds are getting more flexible and provide instant liquidity.
EXAMPLE OF FUND WHERE YOU CAN INVEST
Religare PSU, Sahara Star Value Fund, Kotak Select Focus Fund, Canara Robeco F.O.R.C.E Fund – Retail Plan, Franklin Build India Fund, Mirae Asset Short Term Bond Fund – Regular Plan, Quantum Equity Fund of Funds, Shinsei Liquid Fund – Retail Plan, Reliance Infrastructure Fund – Retail Plan, Edelweiss Nifty Enhancer Fund, Morgan Stanley Short Term Bond Fund – Regular Plan, Morgan Stanley Active Bond Fund – Regular Plan , Edelweiss Diversified Growth Equity Fund, ICICI Pru Target Returns Fund, SBI Gold Exchange, Taurus Ethical, IDFC India GDP Growth Fund, and Fidelity Wealth Builder.
QUOTE OF THE DAY
Open-end funds can be risky depending on the strategies and objectives, but it could still provide flexibility and the benefit of diversified investments, allowing your assets to be allocated among many different types of holdings. Diversifying your investment is a must because your assets are not impacted by the fluctuation price of only one stock. If a stock in the fund drops in value, it may not impact your total investment as another holding in the fund may be up. But, if you have all of your assets in that one stock, and it takes a dive, you’re likely to feel a more considerable loss.
An open fund issues and redeems shares on demand, whenever investors put money into the fund or take it out. Since this happens routinely every day, total assets of the fund grow and shrink as money flows in and out daily. The more investors buy a fund, the more shares there will be. There’s no limit to the number of shares the fund can issue. Nor is the value of each individual share affected by the number outstanding, because net asset value is determined solely by the change in prices of the stocks or bonds the fund owns, not the size of the fund itself. Some open-ended funds charge an entry load usually a percentage of the net asset value, which is deducted from the amount invested.